Heart-health spreads maker Smart Balance has unveiled plans to split into two business segments, move its HQ to Boulder, CO, and change its name to Boulder Brands as it moves “from a single‐brand, single‐category model to a comprehensive, natural brands‐based, balanced portfolio”.
The New Jersey-based firm, which snapped up gluten-free expert Udi’s Health Foods in June in a $125m deal and Glutino Food Group in August 2011 for $66m, is on a mission is to become “the leading health and wellness company building out and acquiring natural brands”, said chief executive Steve Hughes.
Speaking to FoodNavigator-USA about the changes, SVP investor relations & business development Carole Buyers said: "Given the two acquisitions over the past 14 months, the company’s near-term focus is on paying down debt.
"Longer term, however, we will likely look to make additional acquisitions. Our acquisition criteria is one with a focus on health and wellness brands that originate in the natural channel, are need-state focus (such as Smart Balance to heart-health; Glutino and Udi’s to gluten-free and Earth Balance to plant-based diets) and are expandable across categories."
Boulder: The Silicon Valley of natural foods?
Under the re-organization, bosses will establish two divisions: Smart Balance and Natural Brands, which will report separately from Q3, 2012, and will move its primary corporate offices to Boulder - “the Silicon Valley of natural foods” - in 2013.
The Smart Balance unit will comprise Smart Balance heart-healthy spreads and beverages and will be led by John Becker; the Natural Brands unit will comprise Earth Balance vegan foods, Glutino gluten-free products and Udi’s branded products (also strong in gluten-free), and will be led by TJ McIntyre.
“Udi's, Glutino, and Earth Balance, combined, are expected to represent approximately 50% of revenue in 2013, making us the #4 marketer of natural brands”, said Hughes.
Company offices in Denver and Niwot will be consolidated in Boulder, along with the relocation of a handful of out-of-state employees, while employees based at the Paramus office in New Jersey will remain in place, said Buyers.
"The change will not have any impact to the Paramus, NJ, office staff near-term or long-term. The NJ office is home to our CFO and CIO as well as our finance, accounting, operations and R&D departments. The CO office is home to our chairman and CEO, brand leaders, and our marketing, sales, human resources, investor relations and business development departments."
However, the role of president and chief operating officer, currently held by Terry Schulke, will be eliminated, said Hughes.
“As it became clear that the best structure for the company would comprise two business segments based in Boulder, Terry decided he would prefer to pursue an opportunity that might enable him to run his own company.”
Becker tasked with restoring Smart Balance to growth platform
He said: “John led our development and launch into Better Butter and will, in the near term, maintain focus to hold the line on profits in our core spreads and grocery until broader economic conditions improve and we can move Smart Balance back into a growth platform."
Buyers added: "Similar to other categories in the conventional supermarket channel, Smart Balance spreads have had challenges in the current environment with volume declines over the past 2 years.
"We are proactively focused, however, on the premium segment of spreads (Earth Balance and Smart Balance) and spreadable butter (we have a new launch this year with Smart Balance Spreadable butter), which has better growth prospects within the spreads category.
"Our Natural Segment brands have attractive growth and this diversification with two acquisitions into gluten-free have certainly helped transform our company."